The recession is forcing investors to delay their retirement, according to a recent survey by research firm Gallup Organization on behalf of UBS AG -- a global financial services firm based in Switzerland.

One in five participants in the survey of 1,000 investors nationwide said the economy is forcing them to add several years to their target retirement date, with 19% saying they expect to retire 4 years later than originally anticipated. And perhaps most significantly, 24% believe the recession will have a negative impact on their standard of living in retirement. Not surprisingly, this was most marked in the senior age group, with 38% of those 60 and older agreeing with the statement.

Dealing with client pessimism is a major challenge for financial planners, who are probably feeling the heat from older clients who have either decided to delay their retirements or have been forced to make cutbacks on spending and gifting now they are retired.

For Carter, he makes sure clients who are within a year of retirement -- or at retirement -- have one year’s worth of living expenses in cash and five years worth of living expenses in bonds.

For many financial planners, the economic downturn makes for more worried clients and more calls for conservative asset allocation models in their portfolios. "There’s a lot more nervousness on the part of the clients and the reps for that matter," said Stephen Englese, senior vice president of securities operations at Equity Services, a broker-dealer in Montpelier, Vt.

Yet many advisers insist that adequate contingency planning and a proactive approach to client education should help people see beyond the recent downturn. "Our job to ease the concerns, but also structure clients appropriately so that there isn’t a reason for concern in the first place," said Steven Carter of Carter Financial in La Jolla, Calif. "The games not over just because of two bad years." However, "it is hard to recover from two significant down years, right at the end of your career," he concedes.

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